What if it breaks, what if the car breaks down, or I lose my cell phone…
We all have one of those days, sometimes one of those weeks. Put it down to bad luck or the universe not being on our side. We’re human so that makes us worry and companies know that. Sometimes it’s the fear and uncertainty of everyday living that costs us more money than it should.
What got me thinking about this? I’ve been reading a couple of financial books (I’ll be reviewing them here on BSG at a later date), and both of them mentioned that oftentimes we pay more because a company has played into our fear.
For example, the extended warranty on the TV you just purchased. The security system in your house because you’d never forgive yourself if someone broke in and took all your stuff.
Now don’t get me wrong, some of these things are a great idea but some of them can be a waste of your money. So how do you separate the real fear from the fear factor companies would like you to feel as you make a decision about handing your money over to them?
Do Your Research
I remember my late father would check and check on prices, deals; you name it, before he purchased something. Back in those days, they Internet wasn’t around so he had to either physically go to a store or make lots of phone calls. It’s a lot easier now because you can surf the web. Things I look for are-What’s the general feedback about the product? Are people reporting the same issue? Has the same part broken for just about everyone? This not only helps you decide if you want to buy something in the first place but buy its extended warranty too?
Get a Second Opinion
You wouldn’t take one doctor’s word about an illness, treatment or surgery and the same goes for buying things or fixing things. Get a second opinion before you buy an extended warranty or have work done to fix an issue in your home or car.
How Valuable Is This To Me?
Another thing both these books have in common is they talk about the relationship between money and value. How much do you value something? Are you willing to pay more for it? I always think if I use something for my work and I’d lose money if it broke and I had to replace it then I’m more inclined to take an extended warranty or buy a better brand or model.
Bottom line is don’t get talked into something before you’ve done your homework, don’t let a salesperson play on your fears, but judge each situation on a case by case basis. It’s what I’ve learned to do, what the authors of these books have learned to do, and in the long run it can save you money.
What’s your criteria for buying extended warranties or added services? Share it with the BSG community and if you’re not already a subscriber, think about joining us so you don’t miss one single post.